Earnings Per Share

6 Months Ended

Dec. 31, 2021

Basic earnings per common share is computed by dividing net earnings available to common shareholders by the weighted-average number of shares of common stock outstanding during the period.

Diluted earnings per common share is computed by dividing the diluted earnings available to common shareholders by the weighted-average number of shares of common stock and potentially dilutive shares of common stock outstanding during the period. The dilutive effect of equity awards is calculated based on the average stock price for each fiscal period, using the treasury stock method. For the three and six months ended December 31, 2021, diluted shares outstanding include the dilutive effect of the potential shares II-VI Common Stock issuable from stock options, performance and restricted shares, as well as the shares of II-VI Common Stock issuable upon conversion of outstanding convertible debt.

Potentially dilutive shares whose effect would have been anti-dilutive are excluded from the computation of diluted earnings per common share. For the three and six months ended December 31, 2021, diluted earnings per share excluded the potentially dilutive effect of the Series A Mandatory Convertible Preferred Stock and the Series B Convertible Preferred Stock (under the If-Converted method), as their effects were anti-dilutive.

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the three and six months ended December 31, 2021 ($000):


	Three Months Ended December 31,				Six Months Ended December 31,
	2021		2020			2021		2020
Numerator
Net earnings	$	67,657	$	87,900		$	142,121	$	134,166
Deduct Series A preferred stock dividends	(6,900)		(6,900)			(13,800)		(13,340)
Deduct Series B dividends and deemed dividends	(9,803)		—			(19,985)		—
Basic earnings available to common shareholders	$	50,954	$	81,000		$	108,336	$	120,826

Effect of dilutive securities:
Add back interest on II-VI Convertible Notes (net of tax)	$	577	$	3,066		$	1,079	$	6,132

Diluted earnings available to common shareholders	$	51,531	$	84,066		$	109,415	$	126,958

Denominator
Weighted average shares	106,158		104,092			105,960		103,450
Effect of dilutive securities:
Common stock equivalents	2,952		3,630			2,854		3,034
II-VI Convertible Notes	7,330		7,331			7,330		7,331


Diluted weighted average common shares	116,440		115,053			116,144		113,815

Basic earnings per common share	$	0.48	$	0.78		$	1.02	$	1.17

Diluted earnings per common share	$	0.44	$	0.73		$	0.94	$	1.12

The following table presents potential shares of II-VI Common Stock excluded from the calculation of diluted earnings per share as their effect would have been anti-dilutive for the three and six months ended December 31, 2021 (000):


	Three Months Ended December 31,		Six Months Ended December 31,
	2021	2020	2021	2020
Common stock equivalents	2	21	16	225
Series A Mandatory Convertible Preferred Stock	8,915	8,915	8,915	8,922


Series B Redeemable Preferred Stock	9,105	—	9,049	—
Total anti-dilutive shares	18,022	8,936	17,980	9,147